Corporate governance in Lebanese banks. (c2016)

Abstract

Banks in Lebanon are the central depository platform of the overall economy’s funds and liquid assets. They have worked as a main pillar for the economy over several decades before, as well as being essential to attracting and securing foreign investments into the country. Given that agency problems and poor governance systems have led to many banking problems and money crises across the globe, evaluating the status of the banking governance in Lebanon becomes essential to identify and mitigate risks, and optimally abide by recognized international standards. I aim in this thesis to investigate about the corporate governance practices applied in Lebanese banks, and greatly focusing on the Board of Directors structure. The study gathers information from 67 operational banks working in Lebanon with physical presence in the country. Data used covers almost all the country's banks having operated in the current year, whether Lebanese or of foreign ownership. Within this framework, we created a Board of Directors Index using ISS scoreboard, accessed the available information for banks, linked the findings to the international corporate governance standards and compared the scores of BoD with financial performance indicators and BvD ownership structure. For further analysis, banks were grouped into local and foreign entities and ranked by tiers based on total assets. BoD Index is also grouped into three subgroups.